Companies buy other companies all the time, and somebody has to tell them whether it is a good idea. That somebody is often a consultant, which is why acquisition cases turn up so heavily in interviews. This deck sits on the client’s side of the table: why buy at all, whether the target is really the business it claims to be, what it is genuinely worth to this particular buyer, and whether the two can be put together without breaking either one. You will lean on the structuring, market, profitability and strategy work you have already done, now applied to a decision with a price tag attached. No finance background assumed.
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Card 1 of 15
Your engagement manager tells you Redmayne Group wants to buy a competitor and asks you to frame the work. How is a consultant’s job on an M&A case different from a banker’s?
A banker asks whether the deal can be done, a consultant asks whether it should be.
A banker’s work sits around executing a transaction, finding a counterparty, running the process and settling on a price. A consultant is usually hired earlier and asks a blunter question: is this deal a good idea at all. That means testing whether the target’s market is genuinely growing, whether its profits will survive contact with reality, whether the benefits of combining are real, and whether the buyer can absorb the business afterwards. You can be handed a deal that is priced perfectly sensibly and still recommend the client walk away.
Card 2 of 15
An interviewer gives you almost nothing: “our client wants to buy this company, should they?” What is the core structure for an acquisition case?
Four questions: why buy at all, is the target good, what is it worth to us, can we integrate it.
Work through four questions in order: why buy at all, meaning what the client is trying to achieve and whether buying beats building it or partnering; is the target a good business, which is where the market and profitability work you already know earns its keep; what is it worth to this particular buyer, which is standalone value plus whatever the two create together; and can the client actually integrate it. A convincing no on any one of those is a finished answer, not a failure to reach the end.
Card 3 of 15
The CEO of Halverson Packaging tells your team he wants to double revenue in three years and acquisitions are the fastest route. Why should that make you uneasy, and what is a real reason to buy a company?
A good rationale names a specific advantage the two companies only have together.
Speed is a motive, not a rationale. The legitimate reasons all name something the combination creates that neither side has alone: scale that lowers unit costs in a business where scale genuinely matters, a capability or technology the client cannot build fast enough, access to customers or a geography that would take years to win, or consolidating a fragmented market. The weak ones are growth for its own sake, diversification with no shared logic, buying because debt is cheap, and the quiet one nobody says out loud, a chief executive who wants a bigger company to run.
Card 4 of 15
What is commercial due diligence, and what is it actually trying to do?
Commercial diligence tries to break the target’s growth story before the client pays for it.
Due diligence is the investigation a buyer runs before committing, and the commercial piece is the outside-in view: how big the market really is, how fast it is really growing, how defensible the target’s position is, and whether its customers would stay if a rival called tomorrow. The useful framing is disproof. The seller’s plan is a hypothesis, and your job is to find the evidence that would kill it, usually from customer interviews and independent market data rather than from the seller’s own pack. Failing to break the story is the strongest thing you can honestly say.
Card 5 of 15
A partner asks who needs to be in the room for diligence on Sennen Coatings before the client commits. What are the main diligence workstreams, and what does each one own?
Six workstreams, commercial, financial, operational, legal, tech and people, each test a different risk.
Commercial owns the demand story, the market and the customers. Financial checks that reported earnings are real and repeatable rather than flattered by one-off gains, while operational asks whether the plants, the network and the supply chain can deliver the volumes the plan assumes. Legal hunts for what is buried, contracts, disputes and licences that transfer badly, and technology asks whether two sets of systems can ever be joined. People covers who stays. They run in parallel, and the real value tends to come from where their findings contradict each other.
Card 6 of 15
Your client’s model shows $90 million of synergies on a deal, $60 million from cost and $30 million from revenue. Why will a good adviser treat those two numbers very differently?
Cost synergies are inside your control, revenue synergies need customers to agree.
A synergy is value the two businesses produce together that neither produces alone. Cost synergies come from removing duplication, one head office instead of two, one distribution network, better purchasing terms across a bigger order book. The buyer can name those line items and act on them unilaterally. Revenue synergies, mostly cross-selling and wider distribution, require customers to behave in a way nobody has yet asked them about, so experienced teams discount them heavily or strip them out of the price entirely and treat them as upside rather than as something worth paying for.
Card 7 of 15
An interviewer says “we’ll save money by combining the two head offices.” How would you turn that sentence into a number you would actually defend?
Build a synergy from a driver you can count, then split recurring savings from one-time costs.
Go bottom-up from something countable: how many duplicated roles exist, at what fully loaded cost including benefits and property, and how quickly they can realistically come out given notice periods and the risk of gutting the business. Then sanity check the total against the target’s whole overhead line, because a number that lands at forty per cent of it is not credible. Finally separate recurring savings, which repeat every year and therefore carry real value, from one-time items like severance and a building sale, which happen once and cannot be capitalised as if they were permanent.
Card 8 of 15
Your team has stacked up $90 million of synergies on Sennen Coatings. The partner asks what has to come back out of that number before it goes in front of the client. What does she mean?
Gross synergies minus dis-synergies and cost to achieve is the only number worth paying for.
Dis-synergies are value the combination destroys: customers who deliberately keep two suppliers and drop one of you, large buyers who use the merger to demand a single lower price, salespeople who leave and take accounts with them, and the general drag of managers spending a year on integration instead of on customers. Cost to achieve is the cash you spend getting there, severance, systems, rebranding, advisers. Both are real and both are usually missing from the seller’s pack, which is exactly why the net number, not the headline, is what belongs in a price.
Card 9 of 15
Diligence on Brackley Tools shows its three largest customers are 55% of revenue, and two of those already buy from your client. Why does that combination worry you more than either fact alone?
Shared customers can consolidate spend, so overlap often shrinks combined revenue instead of adding to it.
Concentration means a single lost account moves the whole investment case, so you check contract lengths, renewal dates and whether the relationship sits with the company or with one departing salesperson. Overlap makes it worse. A customer buying from both sides today can renegotiate one contract at the better of the two prices, or decide it no longer wants a single supplier for a critical input and drop one of you on purpose. So combined revenue is frequently less than the sum of the parts, which turns a headline revenue synergy into a quiet revenue dis-synergy.
Card 10 of 15
An interviewer says culture is a soft factor and pushes you on why a consulting team would burn real diligence hours on it. What do you say?
When the value walks out at night, retention is the number that decides the outcome.
In people-heavy businesses, software, professional services, anything sales-led, the assets are relationships and know-how, and they can resign. That makes it measurable rather than soft: voluntary attrition before the deal was announced, how many revenue-owning staff are under retention agreements, how differently the two sides pay and promote, and how long each takes to make a decision. If a third of the target’s engineers leave in year one, the roadmap slips, the cross-selling never happens and the revenue synergies you were counting on quietly disappear.
Card 11 of 15
Your client asks what actually happens the morning after the deal closes on Trelane Logistics. What does integration planning cover, and where does it usually go wrong?
Plan day one, the first hundred days and the long tail separately, and staff the plan before closing.
Day one is about nothing breaking: people get paid, orders get filled, customers get a call, and everyone knows who they report to. The first hundred days is where visible decisions get made, the operating model is settled and every synergy gets a named owner and a date. The long tail, systems, sites and brands, runs for years. What goes wrong is rarely the plan itself. It is leaders pulled off the base business, decisions deferred until the vacuum sends the best people to competitors, and a synergy number nobody was ever personally accountable for.
Card 12 of 15
Your team concludes Oakhurst Medical is an excellent business and a perfect strategic fit, and the client is ready to pay a 60% premium. Why is that still not a recommendation to buy?
A great company bought at too high a price is still a bad investment.
What the target is worth to your client is its standalone value plus the net synergies you were able to defend. The premium is what the client pays the seller above the standalone value, and it is paid on day one, in cash, before a single synergy has been delivered. If the premium is larger than the net synergies, the client has handed the seller the value its own people still have to go and create, and has taken all the execution risk in exchange. Good target, good fit, bad deal is a completely coherent recommendation.
Card 13 of 15
Halverson Packaging is now in a competitive auction and the CEO tells your partner he refuses to lose this one. What discipline should the team have put in place before the bidding started?
Set the maximum price from your own analysis before the auction, and write down what could move it.
A walk-away price is the highest number at which the deal still creates value for the client: standalone value plus net synergies, less a margin for everything diligence could not verify. It gets set in writing before the emotion of an auction arrives, along with the specific facts that would justify moving it. That distinction matters because auctions reward optimism, and the winner is often simply the bidder who believed the rosiest forecast. Raising a bid because a new fact emerged is analysis, raising it because you want to win is not.
Card 14 of 15
Your client wants to buy one division of Redmayne Group rather than the whole company. Why is a carve-out harder to diligence than buying a standalone business?
A carve-out’s reported profit is an allocation, not a business that has ever stood on its own.
A carve-out is a division separated from its parent, and it has never had its own finance, HR, IT or leadership team. The profit it reports rests on an internal overhead charge from the parent, which is almost never what those functions cost to build and run alone, so the first job is rebuilding a genuine standalone cost base. Then you ask which contracts, licences and customer relationships actually transfer, and you price the transition services agreement, the temporary deal where the seller keeps running things for a fee while the buyer stands the business up.
Card 15 of 15
Final page, and the evidence is mixed. Kestrel Plastics sits in a growing market with credible cost synergies, but customer concentration is high and two key managers plan to leave. Your partner wants a recommendation, not a list.
Lead with the answer, then the two or three facts behind it, then what would change your mind.
Land on a conditional yes: proceed, but only at or below the walk-away price, and only with retention packages agreed for the two managers and a multi-year commitment from the largest customer before signing. Then give the two facts driving it, the market growth and the defensible cost synergies, and name the risk you are knowingly accepting. Conditions are not hedging, they convert your two open risks into things the client can act on while it still has leverage. A findings list with no decision in it is unfinished work.
Reading is not the same as remembering. Study this deck with scheduled review so the cards come back before you forget them.